Attracting Foreign Participation in Asian Local Currency Bond Markets: The Case of the Asian Bond Fund 2 Initiative

19 Pages Posted: 23 Aug 2012

See all articles by Frank Packer

Frank Packer

Bank for International Settlements (BIS)

Eli M. Remolona

Bank for International Settlements (BIS) - Monetary and Economic Department

Date Written: August 2012

Abstract

The Asian Bond Fund 2 (ABF2) is a $US2bn initiative by a group of central banks in Asia and the Pacific. To promote local currency government bond markets, the fund has been investing in 8 such markets in the region. These markets have made impressive strides since the fund's inception in 2005. The improvements may be traced in large part to overcoming a number of market impediments, including barriers to cross‐border investment. The ABF2 project has played an important catalytic role in market reforms aimed at removing these impediments. However, while the government bond markets have come of age, the corporate bond markets have remained immature. To develop, the immature markets would likely require the benefits of further opening up to regional issuance and investment flows.

Suggested Citation

Packer, Frank and Remolona, Eli M., Attracting Foreign Participation in Asian Local Currency Bond Markets: The Case of the Asian Bond Fund 2 Initiative (August 2012). Pacific Economic Review, Vol. 17, Issue 3, pp. 415-433, 2012. Available at SSRN: https://ssrn.com/abstract=2134751 or http://dx.doi.org/10.1111/j.1468-0106.2012.00591.x

Frank Packer (Contact Author)

Bank for International Settlements (BIS) ( email )

CH-4002 Basel, Basel-Stadt
Switzerland
4161 280 8449 (Phone)

Eli M. Remolona

Bank for International Settlements (BIS) - Monetary and Economic Department ( email )

IFC 2 Bldg, 78/F
Central
Hong Kong
Hong Kong
+852 2982 7150 (Phone)
+852 2982 7123 (Fax)

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